If you manage a group of loyal employees who always go the extra mile, you’re in a unique position. For most U.S. employers, employee turnover is a common struggle, especially in a tight labor market. While lack of pay and limited advancement opportunities usually top the list of reasons employees quit their jobs, there’s often more to the story.
When a valuable employee has one foot out the door, many companies immediately offer them more money to get them to stay. While it’s a tactic that might work in the moment, it’s not a sustainable solution for retaining employees over the long term. According to a Harvard Business Review article, data shows that 50% of employees who accept a counteroffer leave within 12 months. After all, not every employee is motivated by money. Perhaps, it’s more praise, challenge or autonomy they seek.
If you find yourself experiencing a mass exodus of talent, you need to find out if you’re missing the mark as a manager or if it’s part of a bigger company issue. Maybe employees don’t feel like they’re reaching their full potential, or they’re tired of others taking credit for their work. Whatever the reason, every employee has a unique “love language” that managers should speak to.
Think in terms of Maslow’s hierarchy of needs. For employees to remain loyal and engaged, companies must meet their basic, psychological and self-fulfillment needs. Failing to do so can negatively impact a company’s bottom line. After all, employee turnover is expensive and can lead to decreased productivity and employee morale.
The High Cost of Employee Turnover
While the exact cost of employee turnover varies, a CAP study found the average cost to replace someone earning under $30,000 a year is 16% of annual salary. So, the cost to replace a $10 per hour retail employee would be $3,328. Replacement costs for midrange positions earning between $30,000 and $50,000 is 20% of annual salary. Thus, the cost to fill a manager role that pays $40,000 a year would be $8,000.
Factors that contribute to the financial loss of losing a good employee include the cost-of-vacancy for an open position and the investment of recruiting, hiring and onboarding a replacement. Turnover also has a cultural impact on an organization. Existing employees often experience increased stress because they’re taking on additional work until the company fills the position.
Furthermore, if understaffing workarounds become the rule rather than the exception, it’s easier for employees to become rooted in bad habits that diminish company best practices.
Last but not least, when a trusted, respected employee quits, their co-workers start looking for problems and wonder if they should jump ship. This scenario could lead to copycat departures, creating further instability and low morale within the organization.
4 Employee Retention Strategies
Now that you understand some of the implications of employee turnover, it’s time to discuss ways your company can retain a loyal, happy workforce.
- Provide Skills Training
Good employers make ongoing skills development part of their company culture. By doing so, employees can perform their jobs better and, in turn, feel more vested in the company. They also see themselves as more valuable (which they are) and key contributors to the success of a business. According to HR Magazine, companies that invest $1,500 or more per employee per year on training average 24% higher profit margins than those with lower yearly training investments.
- Praise Hard Work
Employee recognition can’t be left to chance. Companies must engrain it into their culture. When employees receive praise, they often feel more loyal to their companies and are motivated to work harder. Not to mention, top-performing employees who receive little praise tend to have lower engagement and are more inclined to quit over time.
- Focus on Feedback
Constructive feedback lends to the ongoing development of an employee. When managers provide it on a routine basis, employees learn from their mistakes and become more confident in their roles. Feedback also reinforces proper behavior and builds a strong culture within a department. In conjunction with feedback, managers need to provide employees with a clear path for career advancement.
- Promote from Within
Giving employees authentic opportunities for growth must be woven into the fabric of a company. When a company promotes from within, they have someone who understands the business, so there’s less of a learning curve. Also, it’s usually faster and cheaper than recruiting from the outside.
180 Skills Training Is the Answer
While integrating ongoing training, recognition and advancement into your business might seem expensive and time-consuming, it doesn’t have to be—and 180 Skills can help.
Our online skills training system is a simple, affordable solution for employee retention. Applicable to a variety of industry segments, from aerospace to telecommunications, and employees of all skill levels, 180 Skills has everything you need to upskill your employees.
By making 180 Skills part of your operations, you can:
- Access nearly 800 skills courses that cover technical, employability and compliance training.
- Motivate employees in all areas of your company by investing in their skills development.
- Provide relevant, short-term training to employees anytime, anywhere and on any device.
- Offer industry-recognized certification programs to employees of all skill levels.
- Download reports to see how employees are progressing and performing in their training.
Want to know more about how 180 Skill can help you reduce your employee turnover costs? Request a demo today!